World stock markets down as weak dollar weighs on Tokyo shares; oil falls

By Jeremiah Marquez, The Associated Press

HONG KONG - Most Asian stock markets retreated Monday, with Japan's benchmark sliding more than 2 per cent following the dollar's recent weakness against the yen. European markets opened lower.

While the greenback recovered some ground later in the day, Japan's stronger currency weighed on major exporters like Toyota Motor Corp. and Canon Inc. amid concerns it would erode the value of their overseas profits. Oil prices fell to near $68 a barrel, while U.S. stock futures pointed to a lower open on Wall Street.

Analysts said the markets seem to be in a short-term holding pattern as investors await more clues about the global economy. Among their chief concerns are Western consumers who've scaled back their spending in the face of growing unemployment, sinking home values and high personal debt.

"The markets are jittery today," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong. "There's still concern we're ahead of the fundamentals. The exports market hasn't completely recovered and the consumer is still not spending, so there's a lot of worry out there."

Early going in Europe's session, Britain's FTSE 100 fell 0.7 per cent, Germany's DAX was off 0.9 per cent and France's CAC-40 dropped 1.1 per cent.

Japan's Nikkei 225 stock average took the day's biggest hit, falling 242.27 points, or 2.3 per cent, to 10,202.06. Toyota, the world's largest car company, lost 2.6 per cent, electronics giant Canon was off 3.4 per cent and Sony dropped 2.4 per cent.

Hong Kong's Hang Seng closed down 1.1 per cent at 20,932.20 while Korea's Kospi shed 1 per cent to 1,634.91.

Elsewhere, Australia's key index lost 1.4 per cent, India's Sensex was down 0.5 per cent and Taiwan's benchmark fell 1.1 per cent.

Shanghai's market defied the downswing, adding 1.2 per cent to 3,026.74.

Looking ahead, investors will be eyeing President Barack Obama's speech Monday about plans to wind down government measures that bailed out debt-laden financial firms last year and to overhaul the country's tattered regulatory regime. He will ask the financial industry to support his overhaul, as well as take responsibility for its failings and learn to police itself. Banks and other financial services companies are expected to pay their employees huge bonuses just a year after being rescued with public money.

Also this week, investors will get some insight into how much U.S. consumers are spending from a government report on August retail sales. They'll also get an indicator of how willing consumers are to borrow money to make those purchases when credit card lender Discover Financial Services reports earnings.

In New York Friday, the Dow Jones industrial average fell 22.07, or 0.2 per cent, to 9,605.41 as investors pulled out of the market following a five-day rally left the market at its highest levels in nearly a year.

The broader Standard&Poor's 500 index fell 1.41, or 0.1 per cent, to 1,042.73, and the Nasdaq composite index fell 3.12, or 0.2 per cent, to 2,080.90.

Dow futures were down 64, or 0.7 per cent, at 9,528 and S&P futures slipped 0.1 point to 1,041.60.

Oil prices dropped in Asia, with benchmark crude for October delivery down 81 cents to us$68.48 a barrel. On Friday, the contract tumbled $2.65 to settle at $69.29.

The dollar, which has tanked in recent days, rebounded modestly to 90.60 yen compared to 90.42 yen. The euro fell to $1.4550 from $1.4597.